Morning Call For Monday, Dec. 10

Overnight Markets And News

Dec S&P 500 E-minis (ESZ18 -0.28%) are down -0.3% this morning on continued US/Chinese tensions and reports that UK Prime Minister May is planning to postpone Tuesday's Parliament Brexit vote. Asian stocks sold off sharply on market worries that the recent US/Canadian arrest of Huawei's CFO could kill the US/Chinese trade talks and result in new tariffs. There was also concern about weak Chinese economic data released over the weekend. Asian stocks today closed sharply lower across the board: Japan Nikkei -2.12%, Hong Kong Hang Seng -1.19%, Shanghai Composite -0.82%, Taiwan -1.16%, Australian S&P 200 -2.27%.

The dollar index (DXY00 +0.15%) this morning is mildly higher by +0.18 (+0.19%) while EUR/USD (^EURUSD +0.30%) is up +0.0035 (+0.31%) and USD/JPY (^USDJPY unch) is slightly lower by -0.05 (-0.04%). March 10-year T-notes (ZNH19 -0-010) are unchanged.

Commodity prices are down by -0.44% on average this morning. Jan WTI crude oil prices are down -0.88 (-1.67%) and Jan gasoline is down -0.89 (-1.44%) as support fades from last Friday's OPEC+ agreement to cut 2019 oil production by 1.2 million bpd. Feb gold this morning is down 1.5 (-0.12%), March silver is down -0.086 (-0.59%), and March copper is down -0.024 (-0.87%) on the mildly stronger dollar. Grains this morning are lower and softs are mixed.

The euro is seeing some support from today's German trade report where Oct exports rose by +0.7% m/m (stronger than expectations of +0.4%) and Oct imports rose by +1.3% m/m (stronger than expectations of +0.5%). Germany's Oct trade surplus eased slight to 18.3 bln euros from Sep's preliminary report of 18.4 bln euros, but was larger than expectations for a decline to 17.1 bln euros.

China's weekend economic data was soft and fueled ongoing worries about the weaker Chinese economy. China's Nov exports rose by +5.4% y/y, weaker than expectations of +9.4%, and Nov imports rose +3.0% y/y, weaker than expectations of +14.0%. China's Nov CPI eased to +2.2% y/y from Oct's +2.5% and was weaker than expectations of +2.4%. China's Nov PPI eased to +2.7% y/y from Oct's +3.3%, which was in line with market expectations. On the brighter side, China's Nov reserves rose to $3.061 trillion from Oct's $3.053 billion, which was larger than market expectations for a decline to $3.044 trillion.

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